Millennials are not owned by credit cards

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Data from the Federal Reserve indicates that the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989, when the Fed began collecting data in a standardized way…

Some older Americans have also been shedding credit card debt since the financial crisis that began in 2008. But for no other age group has the decline in the proportion holding credit card debt been more rapid than it has been for young Americans…the data from the Survey of Consumer Finances shows.

Their reluctance could have lasting repercussions for millennials, as well as for the financial system and the economy. Early use of credit cards has, in the past, helped young Americans develop a comfort level with credit that can last a lifetime and lead to a succession of big purchases financed by debt. Without a substantial credit history, it is much harder to take out a home mortgage, for example…

The resurgence of overall credit card use in the United States over the last year or two has been driven largely by subprime borrowers, according to the Federal Reserve…

But it is clear to economists who study payment patterns that millennials are gravitating toward payment methods that skirt both cash and credit. Why carry cash when you can whip out a debit card for the smallest transaction — a sandwich or a bottle of soda — or use an app like Venmo or an online payment service like PayPal? All of those typically draw funds directly from a bank account…

Recent data has also suggested that millennials are using credit cards less than people of a similar age did in the past — and that they are taking on fewer auto loans and mortgage loans than people of similar age did before the financial crisis.

Many young people carry burdensome loads of student debt, making it hard for them to take on any more debt — and giving them a sour taste in their mouths when it comes to credit of any sort. The average American under 35 now has $17,200 of student debt, 182 percent more than Americans of the same age had in 1995…

Then there are the young professionals who are able to get a card, but have seen the strain that debt put on their families and friends during the financial crisis.

There just may be another quality involved. I have no study at hand to prove it – but, I’m beginning to believe in what I call the George Carlin effect. That is, lots of young people already feel they have enough “stuff” without owning a car or a house.

Guess I’ll have to suggest the question to someone reliable – like the Pew Foundation. Maybe they’re already asking the question?

Banks starting to walk away from foreclosures

Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

So much of the mess reflects the unregulated, unlicensed that still is mortgage loans. Unlike genuine banks, storefront mortgage loan companies are about as regulated and orderly as your friendly neighborhood payday loan shark. Though reasonable, appropriate record-keeping at the level of proper banks will produce necessary documentation.

Oh, regulation? Congress is still discussing it. Republicans and conservative Dems aren’t certain their favorite lobbyists will approve.

Toyota can put a roof over your head, too

Toyota Motor Corp. has put millions of people on four wheels. Now, the global auto giant wants to put roofs over their heads, too.

Best known for its top-selling cars like the Prius and Corolla, Toyota is looking to apply its ecofriendly image and technical know-how to help boost sales of its small and little-known prefabricated-housing division.

Since 1975, Toyota has been building steel-frame houses designed to withstand earthquakes and typhoons and keep out burglars…But with new Japanese government calls for sturdier home construction — to cut down on waste created by home demolitions — and heightened consumer interest in eco-conscious designs, Toyota hopes it will play a leading role in the years ahead in defining not only how the Japanese drive but where they live, too.

Toyota’s aspirations as a home builder are also gaining new importance with the planned launch by 2010 of its plug-in vehicles, gas-electric hybrid cars with powerful lithium-ion batteries that drivers will need to recharge at home. The car maker is testing an electricity-monitoring system in its homes that would charge the vehicle during off-peak hours to keep utility bills low, while the car’s battery can serve as an electrical backup, powering the home during blackouts.

You should even be able to use the same smart key to lock and unlock house and car.🙂

Thanks, Helen